Novartis - SAP Innovation Awards 2026
Novartis' Slow Moving/Non-Moving Goods Inventory (SMNM) solution leverages advanced analytics and SAP technology to streamline inventory management. It enhances efficiency, risk management, and decision-making by providing early warnings for at-risk inventory. This pioneering tool integrates finance and supply chain processes, ensuring compliance and reducing costs, while unlocking future AI use cases for industry-wide transformation. Entry 26165 Download dokumentetInnovation Story
PUBLIC
Slow moving/non moving Goods
Inventory
Novartis
Life Sciences and Healthcare
Financial Futurist
PUBLIC
Slow moving/non moving Goods
Inventory
Novartis
Life Sciences and Healthcare
Financial Futurist
Slow moving/non moving Goods Inventory
(SMNM)
Slow moving non moving Goods Inventory (SMNM) creates a unified data foundation that speeds
up the process now, while unlocking future AI use cases. It is pioneering, scalable, and not just
solving today’s challenge but it also redefines what’s possible for an entire industry
Novartis is one of the world’s largest pharmaceutical companies, operating within a complex and highly regulated supply
chain environment. Our commitment at Novartis is to ensure flawless supply delivery to patients by maintaining efficient,
compliant, and resilient supply chains across all locations.
SMNM is an advanced analytical tool that employs sophisticated calculation logic and is built as an early-warning system.
SMNM uses advanced calculation logic to detect inventory that is at risk of becoming slow-moving or non-moving.
Today, SMNM solution has resulted in increased efficiency, improved risk management, enhanced decision-making, and cost
reductions by minimizing the effort needed for provision calculations. Consequently, we are now better positioned to respond
swiftly to patient and business demands while effectively managing risks in advance.
The SMNM initiative has gained considerable momentum and has paved the way for an upcoming EY teams led Data and AI
hackathon. The Hackathon will leverage SAP Business Data Cloud and Joule to explore new possibilities and solutions that
can further drive our success.
2© 2026 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC
(SMNM)
Slow moving non moving Goods Inventory (SMNM) creates a unified data foundation that speeds
up the process now, while unlocking future AI use cases. It is pioneering, scalable, and not just
solving today’s challenge but it also redefines what’s possible for an entire industry
Novartis is one of the world’s largest pharmaceutical companies, operating within a complex and highly regulated supply
chain environment. Our commitment at Novartis is to ensure flawless supply delivery to patients by maintaining efficient,
compliant, and resilient supply chains across all locations.
SMNM is an advanced analytical tool that employs sophisticated calculation logic and is built as an early-warning system.
SMNM uses advanced calculation logic to detect inventory that is at risk of becoming slow-moving or non-moving.
Today, SMNM solution has resulted in increased efficiency, improved risk management, enhanced decision-making, and cost
reductions by minimizing the effort needed for provision calculations. Consequently, we are now better positioned to respond
swiftly to patient and business demands while effectively managing risks in advance.
The SMNM initiative has gained considerable momentum and has paved the way for an upcoming EY teams led Data and AI
hackathon. The Hackathon will leverage SAP Business Data Cloud and Joule to explore new possibilities and solutions that
can further drive our success.
2© 2026 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC
EXECUTIVE SUMMARY
CHALLENGE SOLUTION OUTCOME
Slow moving/Non moving Goods Inventory (SMNM)
Due to our complex production, regulatory requirements, and
the need for uninterrupted patient supply, our industry
maintains consistently high inventory levels. Inventory
provisioning was previously time consuming and fully
manual, lacking early risk identification and forecasting
capabilities. The current process could lead to compliance
risks with incorrect financial statements.
• Calculation processes were inefficient, error-prone,
labour-intensive, and isolated.
• Inventory fact data lacked forecasting ability.
• Pre-profit elimination provision calculations were
difficult.
• Poor documentation capabilities for supporting Audits
In line with our “Go big on data and digital” strategy, SMNM
is a mechanism to better manage CHF300m write off
avoidance across a CHF5.2bn inventory
SMNM, developed on SAP Profitability and Performance
Management (PaPM) through SAP BW/4HANA, offers an
advanced calculation logic designed to deliver precise,
transparent, and forward-looking stock valuation. This
solution integrates complex accounting principles to
compute provisions fully aligned with internal accounting
standards and policies. Users have seamless access to the
data at any time via a SAP Fiori front-end interface. SMNM is
pioneering, scalable, and a unified solution, fully integrated
within Finance.
The deployment of our SMNM Goods Inventory system has
resulted in substantial advancements across several critical
metrics.
• Compliance: Correct financial statements
• Cross functional: Unified solution fully integrating
Finance and Supply Chain teams
• Standardization: One calculation method across all
countries improving global visibility and compliance.
• Reduction in people & execution time - boosting
operational efficiency and responsiveness.
These improvements enable us to maintain long-term growth
and strengthen our competitive edge in the market. As a
pioneer, we are proud to be the industry's first mover in this
area.
)
150k
SKUs
Write offs managed
across CHF 5.2bn
Inventory 100+
© 2026 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC 3
Deployed countries
300m
CHALLENGE SOLUTION OUTCOME
Slow moving/Non moving Goods Inventory (SMNM)
Due to our complex production, regulatory requirements, and
the need for uninterrupted patient supply, our industry
maintains consistently high inventory levels. Inventory
provisioning was previously time consuming and fully
manual, lacking early risk identification and forecasting
capabilities. The current process could lead to compliance
risks with incorrect financial statements.
• Calculation processes were inefficient, error-prone,
labour-intensive, and isolated.
• Inventory fact data lacked forecasting ability.
• Pre-profit elimination provision calculations were
difficult.
• Poor documentation capabilities for supporting Audits
In line with our “Go big on data and digital” strategy, SMNM
is a mechanism to better manage CHF300m write off
avoidance across a CHF5.2bn inventory
SMNM, developed on SAP Profitability and Performance
Management (PaPM) through SAP BW/4HANA, offers an
advanced calculation logic designed to deliver precise,
transparent, and forward-looking stock valuation. This
solution integrates complex accounting principles to
compute provisions fully aligned with internal accounting
standards and policies. Users have seamless access to the
data at any time via a SAP Fiori front-end interface. SMNM is
pioneering, scalable, and a unified solution, fully integrated
within Finance.
The deployment of our SMNM Goods Inventory system has
resulted in substantial advancements across several critical
metrics.
• Compliance: Correct financial statements
• Cross functional: Unified solution fully integrating
Finance and Supply Chain teams
• Standardization: One calculation method across all
countries improving global visibility and compliance.
• Reduction in people & execution time - boosting
operational efficiency and responsiveness.
These improvements enable us to maintain long-term growth
and strengthen our competitive edge in the market. As a
pioneer, we are proud to be the industry's first mover in this
area.
)
150k
SKUs
Write offs managed
across CHF 5.2bn
Inventory 100+
© 2026 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC 3
Deployed countries
300m
Project details
PROJECT OBJECTIVES USE CASE
DEPLOYMENT COUNTRY DEPLOYMENT DATE NUMBER OF END USERS TRANSACTION VOLUME
The goal of this project was to develop and implement a reliable inventory
provisioning system that delivers precise, transparent, and forward-looking
stock valuation. The solution needed to integrate complex accounting
principles to calculate provisions in strict accordance with internal accounting
standards and policies.
Our Global Finance team faced challenges in accurately generating inventory
risk provisions, taking into account multiple factors such as material life cycle
status, batch quality data, and supply and planning information.
The requirement was to assess inventory write-off risk at the batch level by
considering material life cycle status, batch details, and demand/supply data.
This approach produces a provision recommendation that reflects not only
quality metrics but also the potential risk of stock write-offs caused by market
fluctuations.
The Slow Moving/Non-moving goods inventory feature employs advanced
calculation logic to identify at-risk stock, complemented by enhanced analytics
that offer an “early warning” system for vulnerable inventories
Leveraging SAP PAPM, the application generates provision proposals for slow
and non-moving inventory, categorizing stock into distinct classifications to
increase transparency around inventory risk.
By integrating supply and demand planning data, the model forecasts
potential future write-off risks, thereby enhancing the accuracy and timeliness
of provisioning decisions.
Switzerland January 2025 300 across 80 counties 1+ million journal entries line-items
across 80 locations per month end
close process.
4© 2026 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC
PROJECT OBJECTIVES USE CASE
DEPLOYMENT COUNTRY DEPLOYMENT DATE NUMBER OF END USERS TRANSACTION VOLUME
The goal of this project was to develop and implement a reliable inventory
provisioning system that delivers precise, transparent, and forward-looking
stock valuation. The solution needed to integrate complex accounting
principles to calculate provisions in strict accordance with internal accounting
standards and policies.
Our Global Finance team faced challenges in accurately generating inventory
risk provisions, taking into account multiple factors such as material life cycle
status, batch quality data, and supply and planning information.
The requirement was to assess inventory write-off risk at the batch level by
considering material life cycle status, batch details, and demand/supply data.
This approach produces a provision recommendation that reflects not only
quality metrics but also the potential risk of stock write-offs caused by market
fluctuations.
The Slow Moving/Non-moving goods inventory feature employs advanced
calculation logic to identify at-risk stock, complemented by enhanced analytics
that offer an “early warning” system for vulnerable inventories
Leveraging SAP PAPM, the application generates provision proposals for slow
and non-moving inventory, categorizing stock into distinct classifications to
increase transparency around inventory risk.
By integrating supply and demand planning data, the model forecasts
potential future write-off risks, thereby enhancing the accuracy and timeliness
of provisioning decisions.
Switzerland January 2025 300 across 80 counties 1+ million journal entries line-items
across 80 locations per month end
close process.
4© 2026 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC
Innovations
INNOVATIVE USE OF SAP TECHNOLOGY
WHY SAP
SAP PaPM played a crucial role in addressing the highly complex write-off risk
provisioning requirement, which is unparalleled in the industry. SAP PaPM quickly
processes large volumes of data at a highly detailed level to detect inventory risks
categorized by various reason codes. Featuring an integrated review, commenting,
and posting system, SAP PaPM functions as a comprehensive, standardized solution
for inventory provisioning within our finance department.
The future: SMNM functionality combined with the newest SAP technology. SMNM
will be re-platformed to SAP BDC. This powerful combination is creating a
standardized database that will serve as an enabler for future AI use cases aimed at
optimizing our supply chain process. Some of these use cases include classification
analysis and trending, which will significantly enhance our efficiency and decision-
making capabilities.
The SMNM initiative has gained considerable momentum and has paved the way for
an upcoming EY teams led Data and AI hackathon. The Hackathon will leverage SAP
BDC and Joule to explore new possibilities and solutions that can further drive our
success.
SAP PaPM was chosen as a business semantics engine, due to its seamless
integration with existing SAP systems and its powerful capability to perform mass
transformation of data with high performance.
SAP PaPM enables the modelling of sophisticated provisioning logic using
configurable calculation rules rather than custom code. This allows Novartis to
consistently apply provisioning methodologies across large product portfolios while
maintaining full traceability of inputs, calculations, and outputs—an essential
requirement for financial control, audit, and compliance.
“The SMNM module we developed internally, brings a much-needed
automation and control over our slow-movers risk in inventory. Given our
complex production process, regulatory framework and the need to
provide flawless supply to our patients, pharma has always structurally
high levels of inventory that carries a sizeable obsolescence risk”
Carlos Bastianelli, Head Finance Large Molecules and CGT
5© 2026 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC
“SMNM is our groundbreaking inventory solution that sets a new
standard in the pharmaceutical industry. This innovative technology not
only enhances our supply chain efficiency but also ensures accuracy
and reliability in managing our inventory. We are proud to lead the way
in adopting such advanced SAP solutions that drive growth and success
for our company and our stakeholders.“
Mukul Mehta – Group CFO, Novartis
INNOVATIVE USE OF SAP TECHNOLOGY
WHY SAP
SAP PaPM played a crucial role in addressing the highly complex write-off risk
provisioning requirement, which is unparalleled in the industry. SAP PaPM quickly
processes large volumes of data at a highly detailed level to detect inventory risks
categorized by various reason codes. Featuring an integrated review, commenting,
and posting system, SAP PaPM functions as a comprehensive, standardized solution
for inventory provisioning within our finance department.
The future: SMNM functionality combined with the newest SAP technology. SMNM
will be re-platformed to SAP BDC. This powerful combination is creating a
standardized database that will serve as an enabler for future AI use cases aimed at
optimizing our supply chain process. Some of these use cases include classification
analysis and trending, which will significantly enhance our efficiency and decision-
making capabilities.
The SMNM initiative has gained considerable momentum and has paved the way for
an upcoming EY teams led Data and AI hackathon. The Hackathon will leverage SAP
BDC and Joule to explore new possibilities and solutions that can further drive our
success.
SAP PaPM was chosen as a business semantics engine, due to its seamless
integration with existing SAP systems and its powerful capability to perform mass
transformation of data with high performance.
SAP PaPM enables the modelling of sophisticated provisioning logic using
configurable calculation rules rather than custom code. This allows Novartis to
consistently apply provisioning methodologies across large product portfolios while
maintaining full traceability of inputs, calculations, and outputs—an essential
requirement for financial control, audit, and compliance.
“The SMNM module we developed internally, brings a much-needed
automation and control over our slow-movers risk in inventory. Given our
complex production process, regulatory framework and the need to
provide flawless supply to our patients, pharma has always structurally
high levels of inventory that carries a sizeable obsolescence risk”
Carlos Bastianelli, Head Finance Large Molecules and CGT
5© 2026 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC
“SMNM is our groundbreaking inventory solution that sets a new
standard in the pharmaceutical industry. This innovative technology not
only enhances our supply chain efficiency but also ensures accuracy
and reliability in managing our inventory. We are proud to lead the way
in adopting such advanced SAP solutions that drive growth and success
for our company and our stakeholders.“
Mukul Mehta – Group CFO, Novartis
Benefits and outcomes
BUSINESS AND/OR SOCIETY IT
Slow moving non moving Goods Inventory creates a unified data foundation that unlocks future AI use cases. It is
pioneering, scalable, and not just solving today’s challenge but it also redefines what’s possible for an entire industry
Our foremost commitment is to deliver uninterrupted supply to our patients. To
achieve this, we must maintain supply chains that are efficient, compliant, and
resilient across all production and commercial sites.
Due to the complexity of our manufacturing processes, regulatory requirements,
and patient demands, our industry inherently carries high inventory levels.
SMNM will contribute positively by:
• Increasing automation, allowing teams to concentrate on strategic priorities
• Enabling earlier identification of products approaching expiration
• Reducing the destruction of goods
• Enhancing compliance through comprehensive monthly analyses
• Ensuring simulated scenarios are securely archived for future audits
SAP PaPM interfaces to SAP S/4HANA, SAP BW/4HANA, SAP Business Suite,
SAP Analytics Cloud and SAP Business Planning and Consolidation..
SMNM developed on SAP PaPM through SAP BW/4HANA is controlled by the
business, reducing burden on IT for change requests or amendments. Equally
business users are not limited to IT change cycles.
SAP PaPM SMNM use case functional benefits include:
• Freely definable process chain enables complex calculation and allocation models
without coding, also speeding up change management
• Any existing data model can be used, avoiding field mappings
• Avoid data duplications and replication
• One-stop-shop with no need for additional tools or technologies: Having
calculation engine, commenting & posting features embedded in the tool, it acts
as a One-stop-shop for inventory risk evaluation
• SMNM use case also serves as database for evidence purpose for audits
• End-to-End integrated process to manage the calculation and posting of the
SMNM provision
• Reduce the lead time of the SMNM as a critical part of the monthly process
• Provide a User-centred process and a friendly interface and workflow guided
6© 2026 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC
BUSINESS AND/OR SOCIETY IT
Slow moving non moving Goods Inventory creates a unified data foundation that unlocks future AI use cases. It is
pioneering, scalable, and not just solving today’s challenge but it also redefines what’s possible for an entire industry
Our foremost commitment is to deliver uninterrupted supply to our patients. To
achieve this, we must maintain supply chains that are efficient, compliant, and
resilient across all production and commercial sites.
Due to the complexity of our manufacturing processes, regulatory requirements,
and patient demands, our industry inherently carries high inventory levels.
SMNM will contribute positively by:
• Increasing automation, allowing teams to concentrate on strategic priorities
• Enabling earlier identification of products approaching expiration
• Reducing the destruction of goods
• Enhancing compliance through comprehensive monthly analyses
• Ensuring simulated scenarios are securely archived for future audits
SAP PaPM interfaces to SAP S/4HANA, SAP BW/4HANA, SAP Business Suite,
SAP Analytics Cloud and SAP Business Planning and Consolidation..
SMNM developed on SAP PaPM through SAP BW/4HANA is controlled by the
business, reducing burden on IT for change requests or amendments. Equally
business users are not limited to IT change cycles.
SAP PaPM SMNM use case functional benefits include:
• Freely definable process chain enables complex calculation and allocation models
without coding, also speeding up change management
• Any existing data model can be used, avoiding field mappings
• Avoid data duplications and replication
• One-stop-shop with no need for additional tools or technologies: Having
calculation engine, commenting & posting features embedded in the tool, it acts
as a One-stop-shop for inventory risk evaluation
• SMNM use case also serves as database for evidence purpose for audits
• End-to-End integrated process to manage the calculation and posting of the
SMNM provision
• Reduce the lead time of the SMNM as a critical part of the monthly process
• Provide a User-centred process and a friendly interface and workflow guided
6© 2026 SAP SE or an SAP affiliate company. All rights reserved | PUBLIC